Although i wanted to write about FAQ related to provident fund as i did for Gratuity Act where i have answered some of the frequently asked questions on Gratuity Act. 13 Facts one should know about Gratuity Act in India. While writing my post on PF act FAQ, I observed that it will be good if I describe about fundamental of PF Act first so that you will get basic idea before going through FAQ. This will help you to set up base for FAQ especially to those who are new in the field of labour law.
BASICS OF PROVIDENT FUND
- PF is applicable to companies which have 20 or more employees in any of the month.
- Both employee and employer need to contribute 12% of wages (Basic+DA) capped at Rs 15,000/- in provided fund.
- Employer need to additionally contribute 1.36% of Basic which means total of 13.36% of wages.
- Below are various PF Accounts under which 12% of employee and 13.36% of employer contribution get deposited.
A/c No 1: PF contribution Account : 12% of Employee side + 3.67% of employer side or whatever amount left after contribution to A/c No. 10 i.e EPS Account
A/c No 2: PF Admin account : 0.84% of Basic or Rs 500 minimum : Employer side
A/c No 10: EPS account : 8.33% of Basic capped at 15,000 : Employer side
A/c No 21: EDLI account : 0.5% of Basic capped at 15,000 : Employer side
A/c No 22: EDLI admin account: 0.01% of Basic capped at 15,000 subject to Rs 200 minimum : Employer side
To get more details on EDLI refer post "Insights of EDLI-Employee's Deposit Linked Insurance Scheme".
BENEFITS EMPLOYEE GET UNDER PF ACT:
- Withdrawal Benefit : Withdrawal of PF after leaving services.
- Non refundable advances during membership : Can take advance for some specific purpose without leaving PF membership.
- Superannuation Pension : Member who has rendered eligible service of 20 years and retires on attaining the age of 58 years.
- Retirement Pension : member who has rendered eligible service of 20 years and retires or otherwise ceases to be in employment before attaining the age of 58 years.
- Short service Pension: Member has to render eligible service of 10 years and more but less than 20 years.
- Life Insurance: Through EDLI, Max Rs 1.3 L in case of death.
VARIOUS FORMS RELATED TO PF ACT:
Nature of Benefit
|
Claim Form
|
By whom to be
submitted
|
Settlement of EPF account in case of
Resignation/Retrenchment
|
Form 19
|
Member
|
Settlement of EPF account of a
deceased member
|
Form 20
|
Nominee/Legal Heirs
|
Settlement of Employees’ Deposit
Linked Insurance Fund
|
Form 5(IF)
|
Nominee/Legal Heirs
|
Settlement of
Employees’ Pension Account
|
||
Withdrawal Benefit (in case of
members with less than 10 years of membership)
|
Form 10-C
|
Member
|
Settlement of Lump sum Benefit of
deceased member(who had no family and died when not in service in covered
establishment)
|
Form 10-C
|
Nominee / Parent
|
Availing Scheme Certificate(in case
of members with less than 10 years of membership and or not using above two
options)
|
Form 10-C
|
Member
|
Availing Pension
(all types)
|
||
a)In case of
membership of more than 10 years in EPS and attained the age of 50 for
Reduced Pension and 58 for Superannuation Pension
|
Form 10-D
|
Member / /Nominee
|
b)Died in
service/while holding Scheme Certificate and having a family
|
Form 10-D
|
Family Member
|
c)Died while in
service and nominated any person other than the Family entitled for pension
|
Form 10-D
|
Nominee
|
Advances
|
||
Advances / Withdrawal (For all type
of advances)
|
Form 31
|
Member
|
Nomination Form
|
Form 2 (Revised)
|
Member
|
EMPLOYER RESPONSIBILITY UNDER ACT:
- Provide details of ownership, branches etc to PF and changes whenever occurs.
- Submission of PF Contribution by 15th of every month
- Submission of Form 5 (Addition of employees) and Form 10(Deletion of employees) by 15th of every month. This is now done through PF online site www.epfindia.com
- Maintaining inspection book
- Maintaining eligibility master
- Ensuring that contractual employee PF is depositing as per act.
- Authenticating PF Withdraw, PF transfer, Pension, death claim etc wherever required.
To know answer of many queries related to PF visit the link 17 interesting Facts about PF (Provident Fund) act in India!!
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If you are really serious about learning HR and want to grow then visit our web page LEARN HR THROUGH PRACTICAL IMPLEMENTATION
Join HR Fourm http://hrsuccesstalk.com/forum/
76 comments:
Pls explain more on 3 types of pensions that you mentioned in your post. Are they applicable in private companies. What is that pension, is it something we get apart from the contributions of employee, employer and the interest.
Dear Janardhan,
Thanks for your interest. I will surely write detailed about employee pension fund in upcoming posts. In regards to your second query, pension is part of 12% which employer contribute. Out of 12% employer contributes 8.33% of Basic capped at 6500 goes to pension fund. Interest on PF is separate which is declared by Central Govt every year.
Hi Govind,
What is way to transfer PF ac to other company and where to approach old pf ac transfer to new joining company.
PF can be transferred any time. The procedure for PF transfer is:
Your present employer fill a form No. 13 (revised) mentioning all the information (as per Form 11) regarding PF of your previous employer (with a copy to you) and submit it to it's Regional/sub-regional PF office.
PF office send the form to previous employer for verification. After verification (along with Form 3A, if applicable), Previous employer send the Form-13 to PF office for transfer.
Hi Govind,
can you elaborate more on PF contribution for contactual employees? Do both principal employer and contactual employee need to make PF contribution? If yes, what are the percentages of contribution? does rate of interest on PF differ from what is applicable in case of permanent employess?
Kindly help
thanks
Hi Govind,
what is the procedure for the payement of amount from Provident Fund, pension fund to the employee on attaining Superannuation/retirement? if there is any delay in payment of respected amount to the employee, does employer need to pay any interest? if yes, then how much interest to be charged? if not, what is the maximum permissible limit for the delay in payement?
Kindly reply
thanks
Dear Minal,
Contractual employee is not treated differently in PF Act hence PF Contribution is same as mentioned by me in my post. Rate of interest is same for all types of employees.
You can share your queries on http://hrsuccesstalk.com/forum so that other senior professionals can help you out.
I would suggest that you should share your queries on http://hrsuccesstalk.com/forum so that other senior professionals can help you out.
Hi Govind
I am Jessy and have recently moved to a startup company where some of the HR activities are outsourced and the Consultant told me that there is no need for submission of Form 2 (Nomination Form) nowadays. Is this correct. Does the online entry take care of this.
Await your valuable response.
Thanks & Regards
Jessy
Dear Jessy,
There is no need to submit Form 2 to RPFC now due to online process. Same is mentioned at the website of RPFC when we login with your employer id.
But you should collect Form 2 from employee at the time of joining and keep the same in his personnel file for your record and future use.
Also please share your email id
Dear Sir,
Could you please specify some good books to get detailed information of statuary compliances which mainly covered P.F., E.S.I., Gratuity, Bonus etc.
would be grateful!!
Regards,
Poja Gusain
I read HL Kumar books.
thank you sir
regards,
Poja
You are always welcome Pooja
Dear Govind Sir,
Your blog is of great help thank you for your valuable inputs.
Dear Mr. Govind
At present there are 21 employees in Company.
In that 2 people are not interest to have account in PF.
Now our company is eligible to get register in EPFO.
Regards,
Sharief
Dear Sharief,
Yes, total number of employees is irrespective of their PF eligibility. You have to take PF code.
Dear Mr. Govind
Thanks for your valuable answer.
***Is it compulsory to give the form16 to the employees, if there is no TDS deducted.
***Let me know the calculation of TDS.
***Eligible for Form16?
Waiting for your valuable answer....
Regards,
Sharief
Dear Govind
Please let me know the last date for ECR online filing.
What is the process for form 5 & form 10 submission on online ?
Please do need full
thanks& regards /-
Yoga Praveen.
Dear Yoga,
It will be great if you post your query on HR SUCCESS TALK Forum.
Dear Sharief,
It is not compulsory but if employee demand then you can issue one.
Please post your queries on HR SUCCESS TALK Forum. Website : www.hrsuccesstalk.com
Dear Sharief,
Please refer www.hrsuccesstalk.com Your query related to Form 16 has been answered.
Also please note that you need to select appropriate forum and then click on NEW THREAD to post your query
Dear Negi,
I need a clarification on PF deductions. My basic salary is more than 30k my employer is only deducting Rs.780 as PF in the last year and few of us have requested our company to deduct more PF or the maximum PF, but admin said PF cannot be increased for one or two people in a company and its difficult to do so. Sir is that true? I know if my PF increased employer has to contribute more but is there anyway to increase the PF.?
The above question is asked by myself R.Samuel Devadoss. Thank you.
Dear Mr R Samuel,
Freezing PF contribution on 780 is ok as per law. If company has a policy of capping it on 780, then it can increase it for couple of employees.
If you want to contribute more to PF then you can do it through VPF (Volunteer PF). In this case company will not be liable to contribute more than 780.
You will get tax rebate on your side PF Contribution.
Hi,
Could you please answer what difference is between refundable and non refundable advances granted while in service under PF act. and does these are same in case of withdrawal from Recognized provident fund? If not than what are those?
Dear Friend,
Please mention your queries on www.hrsuccesstalk.com
Hi Govind,
Indeed a self explanatory article. Thanks ! I have a few questions :-
Does operating in different industries (eg, manufacturing or Services) make any difference on whether PF should be applicable in that company) ?
If I have less that Twenty employees (say I have a team of 18 employees) but their salary is more than INR 6,500/ month do I still have to make arrangement for PF ?
Also, Is there a provision where I have more than 20 employees (say 35 employees), their salary is more than 6,500/ month but their employment is on contract basis (say 3 months contract), in this case is the PF binding on our company ?
Please share your thoughts.
Many Thanks,
Tahir
Dear Tahir,
PF is applicable for both manufacturing and service industry hence no differentiation.
PF is applicable only when you have 20 employees in any day of your year.
Contractual employees will also be counted even though there contract is for 3 months.
Request you to post your further queries on our HR Forum.
www.hrsuccesstalk.com
Hi,
Can the PF contribution start from mid of the year?
example: The headcount has reached 20 in June and the company registers itself under the PF scheme in the same month but the employees (who have basic more that 6500) opt for PF deduction only from October or a later month.
Thanks in advance
Regards,
Pradnya
Dear Pradnya,
Employer is liable to deposit PF contribution (both employee and employer along with PF admin charges) from the date PF become applicable to organization. In your case, company need to deposit both contributions since June from its own pocket now till september
Dear Sir,
I have heard that both employer & employee contribute 12% of basic. But above you have mentioned that employer contribute 13.61%. Please
explain me.
Dear Sarita,
Employer also need to contribute PF Admin charges and EDLI to RPFC other than 12% of basic.
Please refer Account number 10,21,22 mentioned above in my blog post.
Dear Sir,
Thanks for your reply. Please also explain me what is this capped at Rs.6500/-?
Regards,
Sarita Pareek
Dear Sarita,
Capping of Rs 6500/- means that PF contribution can be capped till 6500/- if company wish to.
Eg. If Basic of an employee is Rs 10000/- and company wish to cap PF on 6500 then company will contribute and deduct only 12% of 6500 i.e. 780 on each side.
More more queries request you to post on our HR SUCCESS TALK Forum:
www.hrsuccesstalk.com/forum
Sir,
Can it be possible that on the above example the company can deduct 12% of 10000 which comes 1200.
Regards,
Sarita Pareek
Dear Sarita,
Yes, it is possible, if company make a policy of deducting PF on actual basic. It should be same for everyone then.
Again, request you to post your queries on our HR Forum which is made for answering such queries and you will also get response from other Senior HR professionals.
Link is www.hrsuccesstalk.com/forum
Hello,
Is it possible that employer has not pay their part of PF, I can see in my passbook only my contribution is displayed. Not from my employer. Hw to go about this, please advice. Thanks
This is not possible. Speak to your HR
Indeed a helpful post.
Dear Friend,
Thanks a lot for your appreciation.
Dear Govind,
If an employee who joined a company where his Basic+DA >6,500,
1) was given an option whether to opt for or opt out of PF.The employee say suppose opts out of PF and receives the entire amount of salary in hand.Is this possible?
2)suppose his Basic+DA <6,500 and he joins PF.Say after a year the employee moves to a new company. He/she applies PF amount to the previous employer and is amount credited in his account.Is it possible that in his new organization he can opt out of PF if now his Basic+DA >6,500?
Thanks in advance for such posts.I really appreciate your work
Dear friend,
Please refer my another blog on provident fund where you will get answers of your query. If you still have some to ask please go ahead.
http://hrsuccesstalk.blogspot.in/2013/03/17-interesting-facts-about-pf-provident.html
Hello Sir,
If Basic & DA of an employee is less than 6500, than PF will be deducted from the salary?
Dear Friend,
PF should be deducted from employee and contributed by company.
Sir,
I wanted to know that if a pvt. ltd. company having 100 employees and the basic of all the employee is more than 6500/- then is it compulsory for the employer that they will pay the employer EPF share? if the employer don't want to pay his share what should he do?
Dear Chander,
There could be employees whose basic is more than 6500 but they were member of PF. In that case employer should register then in PF
Dear Govind,
Thank you for such wonderful insights!!!
Regards
Megha Gharat
Dear Govind,
What is the policy on withdrawal of EPF deposit by contractual employees in an organization when the contract of previous contractor is terminated and new contractor employs the same employees who continue to work in the same organization. Can they withdraw their EPF on the pretext that the new contractor has allotted new EPF Accounts to them? Kindly clarify.
Is it possible to increase vpf percentage in arrears? Getting arrears for 4 years on salary, want to increase vpf percentage for previous years, is it possible?
Dear Govind Sir,
I left Company A & joined Company B. I have transferred Company A PF to Company B PF account.
The PF of company A has been successfully transferred to Company B PF account. After transfer of PF I noticed from PF statement of Company A that they have not paid last month PF. Now PF account of Company A is settled.
Please help me how I will get that 1 month PF amount from Company A?
Thank you! waiting for your valuable feedback
Regards,
Sandip Shinde
Hello Sir,
If Pf from previous account hasbeen transferred to new account. How I will know/ crosscheck about Pension Fund amount?
Thanks,
Raj
How long does a usual EPF Withdraw take?
Dear givind sir.
i have an doubt about CTC of my company, they included EL encasement like some 500
how it will helps to employee, even they are not paying this amount monthly OR yearly.
is it allowed to employer to show their contribution about EL encasement & when we will received this amount,
please explain briefly.
Dear Mr. Negi
Please tell how much% of PF should be added in CTC, i.e 12% or 25.6% (12%+12%+1.6%).
Hi i have doubt regarding P F calculation that is
1,an employee earns 16000 basic and D A in a month and his payable days(including holidays n sundays,leaves too) are only 25,then what is his P F amount? is that- 1800(calculation is=ROUNDUP(IF(basic+da>=15000,1800,basic+da*12%),0)
or 1452(=ROUNDUP(IF(basic+da>=15000,(15000/month days*payable days*12/100),basic+da/month days*payable days*12/100),0)- which one right?
Pls help me to clear my doubt! thanks in advance.
Dear Megha,
Thanks for your appreciation
Dear Rahul,
First of all, please be informed that PF withdrawal is possible in two situations only...1.. when employee attain an age of 58 years 2. employee stops working anywhere
In your case as employees are moved to another contractor they should ideally transfer their PF From old contractor account to new contractor account
Dear Friend,
I am afraid this might not be possible
Dear Sandip,
you should ideally get the PF for that month. You should contact your previous employer and find out the reason of not depositing the PF in your account
Dear Raj
You can check the same from PF Website. www.epfindia.com
Now PF being online, it should not take more than 1 month
Dear Yogesh,
Leave encashment is as per company policy. As far as company showing it as part of CTC is concern, I would say it is company discretion.
You should ideally get your EL encashment at the time of leaving the organization but as I said it is a per company policy.
In some state leave encashment is mandatory..in that case it should be as per the state shop and establishment act.
Dear Shashi,
It is as per company discretion. They can show PF Admin as part of CTC as well.
Dear Girish,
It should be 1452
Hello Sir
My basic salary is 15000+ and it is with CTC (COST TO COMPANY). 24% of my salary is being detected from my basic salary for PF. I've just come to know that 12% from employer and 12% from employee. I checked the same with concern people but they explained that employer 12% will get from employee salary that's what CTC meant for.
Is it ture? Do I have to pay 24% of my basic salary for PF every month? Please advice....
Thank you
Hello sir,
I am leaving my current company after working around 4 years 9 months, am I elibible for gratuity amount or is there any situation that I can claim for this amount?
Thanks-
Can you tell me now Present PF Account Wise Dedication??
Looks like they have a lot of good training options.
Is it compliant to deduct more than 12% from the basic by the employer without the consent of the employee ?
dear sir
I work 10 years in a Mumbai based company which has branch in new Delhi.i work 10 years in new Delhi branch.due to some personal problem suddenly I quit the job. I don't send any email to company regarding quitting the job or resignation. in these circumstances can I eligible for Gratuity. I leave the job almost 1.5 years ago. my provident fund also deducted. but for last 1.5 years I continue send emails to company but there is no response .pls tell me what I do.can I demand gratuity for my 10 years which I give to company. how I able to do this.pls help
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